Rest. Law Ctr. v. City of N.Y., 17 Civ. 9128 (PGG)

CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
Citation360 F.Supp.3d 192
Docket Number17 Civ. 9128 (PGG)
Parties RESTAURANT LAW CENTER and National Restaurant Association, Plaintiffs, v. CITY OF NEW YORK and Lorelei Salas, in Her Official Capacity as Commissioner of the New York City Department of Consumer Affairs, Defendants.
Decision Date06 February 2019

David I. Miller, Sam Scott Shaulson, Morgan Lewis & Bockius, LLP, New York, NY, Judd Stone, Morgan, Lewis & Bockius LLP, Washington, DC, Julia Sturniolo, Morgan Lewis & Bockius, LLP, Philadelphia, PA, for Plaintiffs.

Emily Stitelman, New York City Law Department, Jeffrey Scott Dantowitz, Office of Corporation Counsel NYC, New York, NY, for Defendants.

MEMORANDUM OPINION & ORDER

Paul G. Gardephe, United States District Judge

This case is brought by the National Restaurant Association – a foodservice trade association – and its legal arm, the Restaurant Law Center. Plaintiffs claim that a recently enacted New York City law and regulation requiring fast food employers in the City to create and administer a payroll deduction scheme – under which employees can donate a portion of their wages to certain non-profit organizations registered with the City – are unconstitutional and preempted by Federal law. The parties have cross-moved for summary judgment.

For the reasons set forth below, Plaintiffs' motion for summary judgment will be denied, and Defendants' motion for summary judgment will be granted.

BACKGROUND
I. FACTUAL BACKGROUND 1
A. Parties

Plaintiff National Restaurant Association (the "Association") is the "largest foodservice trade association in the world[ ] – supporting over 500,000 restaurant businesses." (Sturniolo Decl., Ex. 14 (Dkt No. 50-14) at 2)2 Plaintiff Restaurant Law Center (the "Law Center") was launched in January 2017 to "enhance the restaurant industry's legal advocacy capabilities to provide protection and advancement for the industry, including fighting overregulation at the federal, state and local level." (Id. Ex. 15 (Dkt. No. 50-15) at 2) The Center is a 501(c)(6) entity "affiliated with, but separate from, the [Association]." (Id. )

Defendants are the City of New York (the "City") and Lorelei Salas, in her official capacity as the Commissioner of the New York City Department of Consumer Affairs ("Consumer Affairs"). (Cmplt. (Dkt. No. 1) ¶¶ 9, 10)

Intervenors Kshawn Clark, Christian Malloy, Mica McLawhorn, and Jordan Rodriguez are members of Fast Food Justice who work at fast food restaurants. (Clark Decl. (Dkt. No. 29-1) ¶¶ 2, 3; Malloy Decl. (Dkt. No. 29-2) ¶¶ 2, 3; McLawhorn Decl. (Dkt. No. 29-3) ¶¶ 2, 3; Rodriguez Decl. (Dkt. No. 29-4) ¶¶ 2, 3)

B. The Deductions Law

On May 24, 2017, the New York City Council enacted the "Deductions Law," New York City Administrative Code § 20-1301, etseq. (Def. R. 56.1 Counterstmt. (Dkt. No. 59) ¶ 1) The new law – which became effective on November 26, 2017 – requires certain fast food establishments in New York City to create and maintain a payroll deduction system by which employees can donate a portion of their wages to certain non-profit organizations registered with the New York City Department of Consumer Affairs. (Id. ¶¶ 2-3; N.Y.C. Admin Code § 20-1302 )

The Deductions Law defines a "fast food establishment" as, inter alia, a business that "has as its primary purpose serving food or drink items," and is part of a chain that has thirty or more locations nationwide. (Def. R. 56.1 Counterstmt. (Dkt. No. 59) ¶ 23; N.Y.C. Admin. Code § 20-1301 ) A "fast food employee" is someone who works at a fast food establishment in the City, and whose "job duties include at least one of the following: customer service, cooking, food or drink preparation, delivery, security, stocking supplies or equipment, cleaning or routine maintenance." (Def. R. 56.1 Counterstmt. (Dkt. No. 59) ¶ 25; N.Y.C. Admin. Code § 20-1301 )

Under the Deductions Law, "a fast food employer shall, upon authorization from a fast food employee ... deduct voluntary contributions from such fast food employee's paycheck and remit them to the not-for-profit designated by such fast food employee." N.Y.C. Admin. Code § 20-1302(a). "[N]o later than the first pay period after 15 days of receipt of the authorization," fast food employers must begin deductions from an employee's wages and "remit the deductions to the not-for-profit [designated by the employee], by the method of transmission that such organization requests." Id. § 20-1302(e). The Deductions Law also prohibits retaliation against fast food employees who exercise their rights under the Deductions Law. Id. § 20-1306.

To be eligible to receive employee remittances under the Deductions Law, a nonprofit organization must register with Consumer Affairs. (Def. R. 56.1 Counterstmt. (Dkt. No. 59) ¶ 29; N.Y.C. Admin. Code § 20-1303(a) ) The non-profit organization must provide, inter alia, its name, a physical address, an email address, a web address (if any), a telephone number, and a "contact." (Def. R. 56.1 Counterstmt. (Dkt. No. 59) ¶ 30; N.Y.C. Admin. Code § 20-1303(a)(1) ) The non-profit entity must also collect at least 500 authorizations from fast food employees to who wish to donate a part of their wages to the organization. (Def. R. 56.1 Counterstmt. (Dkt. No. 59) ¶ 32; N.Y.C. Admin. Code § 20-1303(a)(3) )

Labor organizations are not eligible to receive donations pursuant to the Deductions Law. (Def. R. 56.1 Counterstmt. (Dkt. No. 59) ¶ 36; N.Y.C. Admin. Code § 20-1310(b) ) Under the Deductions Law, a "labor organization" is, inter alia,

[a] "labor organization" within the meaning of [ 29 U.S.C. § 152(5) ], which defines a labor organization as "any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work," as such definition is interpreted by the [N]ational [L]abor [R]elations [B]oard.

N.Y.C. Admin. Code § 20-1310(b)(3) (quoting 29 U.S.C. § 152(5) ). The Deductions Law directs Consumer Affairs to "promulgate rules necessary to ensure that this law will be applied in a manner consistent with federal or state labor law." Id. § 20-1310(c).

The Deductions Law authorizes fast food employers to obtain reimbursement for certain costs associated with administering the payroll deduction scheme. Reimbursement is to be provided by the non-profit organization receiving the wage donations: "Upon request by a fast food employer, [a] not-for-profit shall reimburse the fast food employer for the costs associated with deduction and remittance, as calculated pursuant to the rules of [Consumer Affairs]." Id. § 20-1302(g). Pursuant to rules published on November 28, 2017 (see Def. R. 56.1 Counterstmt. (Dkt. No. 59) ¶ 6; see also Implementation of Pay Deductions Law, NYC CITYWIDE ADMIN. SERVS. , https://a856-cityrecord.nyc.gov/RequestDetail/20171127102 (last visited Jan. 30, 2019) ), "the maximum amount per transaction per fast food employee that a fast food employer may charge a not-for-profit is $0.30. ‘Transaction’ ... means the act of both deducting and remitting wages." Rules of City of N.Y. Dept. of Consumer Affairs § 7-707(a). However, fast food employers may seek an exemption from this $0.30 cap "by demonstrating to [Consumer Affairs] that the employer's actual costs exceed that maximum amount." Id. § 7-707(b). A request for reimbursement must be made in writing, must set forth how the cost was calculated, and must be based on the "actual costs ... of making deductions from a fast food employee's paycheck and remitting those deductions to the not-for-profit the fast food employee designated." Id. § 7-707(c), (d).

Non-profit organizations and fast food employees or their representatives may file a complaint with Consumer Affairs for fast food employers' violations of the Deductions Law. (Def. R. 56.1 Counterstmt. (Dkt. No. 59) ¶ 48; N.Y.C. Admin. Code § 20-1307(b)(1) ) Where a fast food employer violates the Deductions Law, Consumer Affairs may award deductions and remittances plus interest, and impose a civil penalty of $500 to $1000 per violation. N.Y.C. Admin. Code § 20-1307(b)(2)(b). Reinstatement and back pay are available remedies where an employer has retaliated against an employee seeking to exercise rights under the Deductions Law. Id. § 1307(b)(2)(a)-(c).

II. PROCEDURAL HISTORY

The Complaint was filed on November 21, 2017. (Dkt. No. 1) On January 4, 2018, Kshawn Clark, Christian Malloy, Mica McLawhorn, and Jordan Rodriguez moved to intervene. (Dkt. No. 27) The Court granted their motion on January 17, 2018. (Dkt. No. 33)

Pending before the Court are the parties' cross-motions for summary judgment. (Dkt. Nos. 47, 57)

DISCUSSION
I. SUMMARY JUDGMENT STANDARD

Summary judgment is warranted where the moving party shows that "there is no genuine dispute as to any material fact" and that it "is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A dispute about a ‘genuine issue’ exists for summary judgment purposes where the evidence is such that a reasonable jury could decide in the non-movant's favor." Beyer v. County of Nassau, 524 F.3d 160, 163 (2d Cir. 2008) (citing Guilbert v. Gardner, 480 F.3d 140, 145 (2d Cir. 2007) ).

" [W]here the nonmoving party will bear the burden of proof at trial, Rule 56 permits the moving party to point to an absence of evidence to support an essential element of the nonmoving party's claim.’ " Lesavoy v. Lane, 2 Civ. 10162, 2008 WL 2704393, at *7 (S.D.N.Y. July 10, 2008) (quoting Bay v. Times Mirror Magazines, Inc., 936 F.2d 112, 116 (2d Cir. 1991) ).

In deciding a summary judgment motion, the Court " ‘resolve[s] all ambiguities, and credit[s] all factual inferences that could rationally be drawn, in favor of the party opposing summary judgment.’ " Spinelli v. City of New York, 579 F.3d 160, 166 (2d Cir. 2009) (quoting Brown v. Henderson, 257 F.3d 246,...

To continue reading

Request your trial
8 cases
  • Lee v. Saul
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • 10 Febrero 2022
    ...Board “has ‘exclusive jurisdiction' . . . when there is an arguable violation of the NLRA.” Rest. Law. Ctr. v. City of New York, 360 F.Supp.3d 192 223 (S.D.N.Y. 2019). As such, “the proper forum to hear [Lee's] complaint is the National Labor Relations Board, not this Court.” Bowman v. New ......
  • Volokh v. James
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • 14 Febrero 2023
    ...employers to set up a mechanism for their employees to donate a portion of their paychecks to a non-profit of that employee's choosing. 360 F.Supp.3d 192 (S.D.N.Y. 2019). The court found that this did not constitute “speech”-nor did it constitute “compelled speech”-noting that the “minister......
  • RHC Operating LLC v. City of New York
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • 30 Marzo 2022
    ...supporting unions. (See Compl. ¶ 72.) But their intent is not relevant to Machinists preemption. See Rest. L. Ctr. v. City of New York, 360 F.Supp.3d 192, 237 (S.D.N.Y. 2019). Plaintiff asserts that the law rewards the Union with “terms and conditions that [the Union] did not and could not ......
  • RHC Operating LLC v. City of New York
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • 30 Marzo 2022
    ...supporting unions. (See Compl. ¶ 72.) But their intent is not relevant to Machinists preemption. See Rest. L. Ctr. v. City of New York, 360 F.Supp.3d 192, 237 (S.D.N.Y. 2019). Plaintiff asserts that the law rewards the Union with “terms and conditions that [the Union] did not and could not ......
  • Request a trial to view additional results
3 books & journal articles
  • Employment law violations
    • United States
    • American Criminal Law Review No. 60-3, July 2023
    • 1 Julio 2023
    ...v. Gardner, 448 F.3d 1082, 1088 (9th Cir. 2006) (using Ryan for meaning of “representative”); Rest. Law Ctr. v. City of New York, 360 F. Supp. 3d 192, 234 (S.D.N.Y. 2019) (same). 285. United States v. McGowan, 58 F.3d 8, 15 (2d Cir. 1995). 286. 29 U.S.C. § 186(b). 287. See Cox v. Adm’r U.S.......
  • Employment Law Violations
    • United States
    • American Criminal Law Review No. 59-3, July 2022
    • 1 Julio 2022
    ...448 F.3d 1082, 1088 (9th Cir. 2006) (using Ryan standard for meaning of “representative”); Rest. Law Ctr. v. City of New York, 360 F. Supp. 3d 192, 234 (S.D.N.Y. 2019) (same). 291. United States v. McGowan, 58 F.3d 8, 15 (2d Cir. 1995) (finding 29 U.S.C. § 186(b) includes functional, ......
  • Constructing Countervailing Power: Law and Organizing in an Era of Political Inequality.
    • United States
    • 1 Enero 2021
    ...fees violate the Constitution). (260.) Sec Fisk & Malin, supra note 222, at 1926-30. (261.) Rest. Law Ctr. v. City of New York, 360 F. Supp. 3d 192, 239-40 (S.D.N.Y. 2019); Justin Miller, In New York City, Fast-Food Workers May Soon Have a Permanent Voice, AM. PROSPECT (June 16, 2017), ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT